Xiamen summit brings new BRICS dimensions

Two years ago Ufa, the capital of Russia's region Bashkortostan, hosted the 7th BRICS summit. In the wake of the event Russian experts and journalists were discussing its 3 principal outcomes: the New Development Bank foundation, a transition to the national currencies trade and the Strategy for the BRICS Economic Partnership until 2020. The Xiamen summit's results allow Russian experts to assess them as a continuation of the policy based in Ufa.

Ahead of the meeting in Xiamen the New Development Bank had presented the second package of investment projects with total worth of $ 1.5 billion and opened a regional center in Africa; the summit Declaration begins with a point on the establishment of the BRICS Local Currency Bond Fund; the next most important summit's documents following the Declaration are the BRICS Action Agenda on Economic and Trade Cooperation until 2020 and the BRICS action plan for innovation cooperation (2017-2020) which are actually none other than the practical applications to the Strategy for the BRICS Economic Partnership until 2020 adopted in Ufa.

The Dialogue of Emerging Market and Developing Countries is held during the BRICS Xiamen Summit in Xiamen, Fujian Province, on Tuesday, September 5, 2017.[Photo: Xinhua]

We should always keep in mind that initially BRICS wasn't an organization, it was just an investment idea promoted by former Goldman Sachs' chief economist Jim O'Neill in 2001-2006. During the first decade of the BRICS existence critics rightly had been pointing out an amorphousness of the club, different interests of its members and a weak economic relationship between them.

After10 years of developing BRICS has got 23% share of global GDP but its mutual trade and investments are still less than 10%. Having entered their second “golden” decade, BRICS countries are trying to accelerate the process of institutionalization, creating new structures, establishing practical cooperation and specifying the plans for coordinated actions. This year it was noticeable by the set of topics of the business forum preceded a meeting of BRICS leaders, its last panel discussion was devoted to inter-regional cooperation. A large delegation of Russian regions' governors took part in the discussion. The delegation was mostly formed out of representatives of the Volga Federal district, a Russian heartland's macro-region since 2013 participating in the mechanism of inter-regional cooperation "Volga-Yangtze" which unites the regions along the biggest rivers of Russia and China. Bashkortostan, whose capital Ufa has already become one of the centers of Russia-China inter-regional cooperation, is among them. Russian regions' officials hope to transfer their experience of developing interaction with Chinese colleagues to other BRICS countries having suggested in Xiamen to establish a common Platform of Inter-regional Cooperation of Brazil, Russia, India, China and South Africa.

Cooperation developing within BRICS has involved not only the inter-regional level but also the so-called “outreach” format. It has been being practiced since 2013 when BRICS leaders held a joint meeting with the heads of the African Union's states on the Durban summit. Since then a country hosting a BRICS summit invites regional neighbours to an “outreach” meeting. In 2014 in Fortaleza, Brazil, the BRICS leaders met their colleagues from the Union of South American Nations, Russia's Ufa in 2015 was visited by the leaders of the Shanghai Cooperation Organization (SCO - China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Uzbekistan) and the Eurasian Economic Union (EAEU - Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia), Indian Benaulim in 2016 welcomed the heads of the Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation states. Following this logic, China should have invited, for example, partners from the Association of South-East Asian Nations (ASEAN) whom Beijing signed a free trade agreement with.

However, in Xiamen in the framework of the outreach format, which in China was called the Emerging Markets and Developing Countries Dialogue, we saw 2 states of the African Union (Egypt and Guinea), one SCO country (Tajikistan) and one ASEAN country (Thailand). Mexico stands out of the rest because from an economic point of view it's being perceived more as a member of the North American Free Trade Agreement (NAFTA - Canada, USA, Mexico). Interestingly the invitation of Mexico to Xiamen was happened on the background of trade conflict in NAFTA. President Trump, promoting a protectionist agenda, wants to renegotiate trade agreement with the US' southern neighbor. Inviting Mexico offended by Washington BRICS sends another signal about the willingness to become a second power center in the global economy and trade.

From this we can make 2 obvious conclusions and one less obvious. First, China has been keeping a focus on Africa and the second is that it positions BRICS as the leader of the developing world. The third conclusion we can get having recalled that Jim O'Neill has invented another, a bit less known acronym MINT (Mexico, Indonesia, Nigeria, Turkey), he thinks that's the second tier of large emerging economies whose contribution to global GDP growth is becoming more noticeable. At the time of the accession of South Africa to BRIC some analysts were in perplexity because its impact on the global economy was not comparable with the influence of Brazil, China, India and Russia. However, it's all would become more obvious if we keep in mind China's objectives and the fact that Africa is the continent with the largest number of developing countries. It is also obvious that if BRICS wants to become a kind of G7 for developing world, it needs to expand at the expense of MINT, so maybe in future we'll be able to see such acronyms as BRINCS, BRIMCS or even BRINCSTIM.